SEGMENT AND GEOGRAPHIC INFORMATION

12 Months Ended

Dec. 31, 2014

SEGMENT AND GEOGRAPHIC INFORMATION [Abstract]

SEGMENT AND GEOGRAPHIC INFORMATION

23. SEGMENT AND GEOGRAPHIC INFORMATION

Segment reporting

The Company's chief operating decision maker has been identified as the Chief Executive Officer who reviews results of operations by business lines when making decisions about allocating resources and assessing performance of the Company. The Company has therefore determined that each business line represents an operating segment and there are three operating segments presented: internet games, mobile games and WVAS.

The Company does not allocate any assets to its operating segments as management does not believe that allocating these assets is useful in evaluating these segments' performance. Accordingly, the Company has not made disclosure of total assets by reportable segment.

	For the years ended December 31,
	2012			2013			2014
Revenues
Internet games	$	82,902,851		$	93,792,294		$	118,099,837
Mobile games		20,970,977			16,908,282			45,036,427
WVAS		76,712,323			62,953,219			64,459,705
		180,586,151			173,653,795			227,595,969
Cost of revenues
Internet games		(39,539,750	)		(45,534,441	)		(61,443,104	)
Mobile games		(10,934,999	)		(7,780,237	)		(22,977,318	)
WVAS		(52,655,523	)		(43,085,208	)		(44,858,641	)
		(103,130,272	)		(96,399,886	)		(129,279,063	)
Gross profit
Internet games		43,363,101			48,257,853			56,656,733
Mobile games		10,035,978			9,128,045			22,059,109
WVAS		24,056,800			19,868,011			19,601,064
		77,455,879			77,253,909			98,316,906
Operating expenses
Product development		(18,382,383	)		(26,401,720	)		(25,107,372	)
Selling and marketing		(24,586,039	)		(26,674,024	)		(42,522,684	)
General and administrative		(11,629,273	)		(8,976,176	)		(12,564,600	)
Impairment loss on intangible assets		-			(1,562,386	)		(1,323,260	)
Total operating expenses		(54,597,695	)		(63,614,306	)		(81,517,916	)
Government subsidies	$	301,359		$	2,176,449		$	1,138,909
Income from operations	$	23,159,543		$	15,816,052		$	17,937,899

Service lines of internet games

The internet games revenues are derived from online game operation revenues and licensing revenues including royalties. Revenues of internet games by service line for the years ended December 31, 2012, 2013 and 2014 are as follows:

	For the years ended December 31,
	2012		2013		2014
Internet games
Online game operation	$	77,676,406	$	91,308,244	$	116,756,333
Licensing arrangement		5,226,445		2,484,050		1,343,504
	$	82,902,851	$	93,792,294	$	118,099,837

Service lines of mobile games

The mobile games revenues comprise revenues from carrier billing channels and revenues from non-carrier billing channels. Revenues of mobile games by service line for the years ended December 31, 2012, 2013 and 2014 are as follows:

	For the years ended December 31,
	2012		2013		2014
Mobile games
- Carrier billing channels	$	15,451,852	$	10,135,756	$	23,808,707
- Non-carrier billing channels		5,519,125		6,772,526		21,227,720
	$	20,970,977	$	16,908,282	$	45,036,427

Service lines of WVAS

The WVAS include Wireless Application Protocol ("WAP") services, Multimedia Messaging Services ("MMS"), Short Messaging Services ("SMS"), Interactive Voice Response services ("IVR"), and Color Ring Back Tones ("CRBT"). Revenues of WVAS by service line for the years ended December 31, 2012, 2013 and 2014 are as follows:

	For the years ended December 31,
	2012		2013		2014
WVAS
- SMS	$	38,647,552	$	31,844,446	$	31,922,975
- IVR		13,255,971		14,658,612		13,210,504
- MMS		3,346,206		1,096,133		968,026
- WAP		2,651,647		708,984		364,750
- CRBT and others		18,810,947		14,645,044		17,993,450
	$	76,712,323	$	62,953,219	$	64,459,705

Geographical information

The Company's operations are mainly located in its country of domicile (i.e. the PRC) and to a lesser extent, overseas. The Company's revenues by geographic areas (based on location of the other signing party of the revenue contract) are detailed below:

	For the years ended December 31,
	2012		2013		2014
PRC	$	170,672,905	$	167,752,785	$	221,935,017
Asia-pacific		3,702,017		913,465		162,797
Europe and America		6,211,229		4,987,545		5,498,155
	$	180,586,151	$	173,653,795	$	227,595,969

The Company's long-lived assets as of December 31, 2013 and 2014 were all located in the PRC.